Confusion on Google costs retailer keyword advertising

By Ralph Wilkinson (UK) on June 26, 2013

“Interflora” infringed as a search term

On May 23, 2013 the High Court of England and Wales (the High Court) granted an EU-wide injunction preventing Marks and Spencer (M&S) from using sponsored adverts on Google which were triggered by keyword searches relating to Interflora. See Injunction.

M&S had purchased several keywords relating to Interflora from the Google advertising service, Adwords. The well-known arrangement is that if a person searched for the word “Interflora” or related terms, Google would also generate sponsored links to M&S’s online flower-delivery service. Interflora claimed that M&S’s use of Interflora as a keyword constituted trade mark infringement. The European Court of Justice has previously considered trade mark issues raised by keyword advertising in six cases, including the judgment it gave in a response to a referral in this case. Under EU case law, it is well established that the owner of a trade mark can only succeed in a claim for infringement if certain conditions are satisfied. In particular, the use of the trade mark by the alleged infringer must have affected or be liable to affect one or more of the essential functions of the trade mark; that is, its origin, advertising, investment or communication functions. The High Court emphasised that there was nothing inherently or inevitably objectionable from a trade mark perspective in using keyword advertising, but in this case it was the particular nature of Interflora’s business that meant the origin function of its trade mark was adversely affected.

M&S Infringes Interflora

The Interflora business model consists of a large network of member retailers who can use Interflora’s services and branding to varying degrees. In addition, Interflora has commercial tie-ups with several large retailers which have included Tesco, Sainsbury’s and Co-op.

It was found that M&S had infringed Interflora’s trade mark because Interflora was able to produce evidence that a significant proportion of people who searched for “Interflora,” and were then shown results for both Interflora and M&S, were not sure if M&S and Interflora were part of the same economic undertaking. Thus, the origin function of Interflora’s trade mark had been adversely affected. The key test that the court applied was whether a significant proportion of reasonably well-informed and reasonably attentive internet users could tell from the M&S advertisements if the M&S service was part of the Interflora network or not. Statistical analysis produced by Interflora as evidence showed that a significant proportion of users were initially confused; they did not realise that the advert for M&S was a sponsored link or that M&S was an independent third party.

Implications

This case is a reminder that sponsored keyword advertising, if not done appropriately, can constitute trade mark infringement. It is the responsibility of the advertiser to ensure that the advertisements make it clear that advertised goods or services do not originate from the keyword trade mark proprietor. Sources: The High Court of England and Wales; The Court of Justice of the European Union.

This article was prepared by Ralph Wilkinson (ralph.wilkinson@nortonrosefulbright.com / +44 20 7444 3151) of Norton Rose Fulbright’s Intellectual property disputes group.